Debate over compulsory licensing of Bayer's Nexavar

The Association of Biotechnology Led Enterprises (ABLE), a national forum that represents the $4 billion biotechnology industry in India reacted sharply to India's grant of a compulsory license to NATCO Pharma. A statement by ABLE says compulsory licenses should be used only when there is a national health crisis or when life-saving drugs are priced out of the reach of a common man, i.e., under some exceptional circumstances.

The organization further noted that governments are likely to interfere under such circumstances, like when a few countries invoked this provision for making available life-saving HIV drugs to its people. India should always keep in mind that a compulsory license should not be invoked in an arbitrary manner as it will undermine the innovative efforts of this industry and consequently invest in this sector.

Most multinational and Indian Pharma companies spend millions of dollars and many man hours to save patients from life threatening diseases and therefore the intent of all these companies broadly is to alleviate suffering of people. However several times, overseas companies price their drug based on who they think can purchase and do not take into account the millions who could be deprived of a treatment due to affordability.

ABLE pointed out that Nexavar is an orphan drug in the US and not approved by National Institute for Health and Clinical Excellence (NICE) for National Health Service (NHS) use in view of the fact that it increases survival in primary liver cancer by only six months. While on pricing when it is obvious that there is a case on the overall utility of this drug which prolongs life by half-a-year, the question is why should India invoke compulsory licensing in the case of Nexavar?

Raising concerns, the biotech industry forum says, "This is a question that will come up for considerable debate as to whether it is really a true life-saving classification. In future, before such rulings are invoked it might be a good idea to debate on the cost of goods versus the cost of innovation. If we put in mechanisms to compensate the companies which do innovation, then the severity of such rulings will be quite considerably mitigated."